The stocks featured in this article are seeing some big returns. Over the past month, they’ve outpaced the market due to some combination of positive news, upbeat results, or supportive macro developments. As such, investors are taking notice and bidding up shares.

But not every company with momentum is a long-term winner, and plenty of investors have lost money betting on short-term fads. All that said, here are three overhyped stocks that may correct and some you should consider instead.

Sensata Technologies (ST)

One-Month Return: +14.6%

Originally a temperature sensor control maker and a subsidiary of Texas Instruments for 60 years, Sensata Technology Holdings (NYSE: ST) is a leading supplier of analog sensors used in industrial and transportation applications, best known for its dominant position in the tire pressure monitoring systems in cars.

Why Are We Out on ST?

1. Sales tumbled by 4.2% annually over the last two years, showing market trends are working against its favor during this cycle
2. Estimated sales growth of 4.3% for the next 12 months is soft and implies weaker demand
3. Gross margin of 29.2% is below its competitors, leaving less money to invest in areas like marketing and R&D

At $48.41 per share, Sensata Technologies trades at 12.5x forward P/E. Read our free research report to see why you should think twice about including ST in your portfolio.

Fluence Energy (FLNC)

One-Month Return: +60.2%

Pioneering the use of lithium-ion batteries for grid storage, Fluence (NASDAQ: FLNC) helps store renewable energy sources with battery systems.

Why Do We Think Twice About FLNC?

1. Earnings per share fell by 3.6% annually over the last two years while its revenue grew, partly because it diluted shareholders
2. Cash-burning tendencies make us wonder if it can sustainably generate shareholder value
3. Depletion of cash reserves could lead to a fundraising event that triggers shareholder dilution

Fluence Energy is trading at $21.40 per share, or 32.8x forward EV-to-EBITDA. If you’re considering FLNC for your portfolio, see our FREE research report to learn more.

CVS Health (CVS)

One-Month Return: +19.5%

With over 9,000 retail pharmacy locations serving as neighborhood health destinations across America, CVS Health (NYSE: CVS) operates retail pharmacies, provides pharmacy benefit management services, and offers health insurance through its Aetna subsidiary.

Why Are We Hesitant About CVS?

1. Annual sales growth of 6.3% over the last two years lagged behind its healthcare peers as its large revenue base made it difficult to generate incremental demand
2. Sales are projected to remain flat over the next 12 months as demand decelerates from its two-year trend
3. Incremental sales over the last five years were much less profitable as its earnings per share fell by 1.5% annually while its revenue grew

CVS Health’s stock price of $93.61 implies a valuation ratio of 12.3x forward P/E. Check out our free in-depth research report to learn more about why CVS doesn’t pass our bar.

Stocks We Like More

ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren't just high-quality businesses. Something is happening with them right now. Elite fundamentals meeting near-term momentum - both boxes checked at the same time.

Find out which stocks our AI platform is flagging this week. See this week's Strong Momentum stocks - FREE. Get Our Strong Momentum Stocks for Free HERE.

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.